The Federal Ministry of Transportation has reassured Nigerians of its commitment to discharging its statutory mandate towards the realization of the “Renewed Hope Agenda” of President Bola Tinubu.
The ministry aims to deliver efficient, affordable and sustainable transport infrastructure for the country with utmost diligence and fidelity.
The Federal Ministry of Transportation made this known following emerging comments and commentaries by certain persons (especially on social media) concerning the status and implications of the Memorandum of Understanding (MoU) signed on 12th February, 2024 by the Minister of Transportation, Senator Said Alkali on behalf of the Ministry with Messrs. MPH Rail Development (UK) Limited, a United Kingdom-registered company with Nigerian and foreign shareholding.
The director press Ministry of Transportation, Mr Olujimi Oyetomi , said for clarity, a memorandum of understanding (MOU) is a non-binding agreement that states each party’s intentions to take action, conduct a business transaction, or form a new partnership. It is not a legally binding agreement. It provides only a platform for further engagement, discussion, scrutiny, and the provision of required guarantees by the parties to reach an agreement if the parties are satisfied.
Mr Oyetomi said the MoU in question arose from an unsolicited proposal presented by the British African Business Alliance (BABA), an Association based in the United Kingdom with interest in business in Africa.
“Its proposal was initially submitted to the Ministry on 27th August, 2019,” he recalled, adding, “As required, the proposal (Outline Business Case) was submitted to the Infrastructure Concession and Regulatory Commission (ICRC) on 8th December, 2023. The major attraction of the proposal is BABA/MPH’s initiative to achieve 100% private sector funding for the project ‘with no loans or debt to the Nigerian Government or any of its agencies’, as captured in Article 3.3 of the MoU. The Regulatory Commission on 27th December, 2023 granted approval and issued a conditional OBC Certification. It is pertinent to note at this juncture, that COVID-19 was a major contributor to the time lag between initial proposal and the ICRC OBC Certification.”
He said: “Messrs. MPH Rail Development (UK), is the company incorporated by BABA, as the Special Purpose Vehicle (SPV) to ‘deliver’ the project. It must be emphasized that a Company to be used for such a purpose is usually new with nominal shareholding to allow for stake holding by parties to the project at the investment stage.”
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